Mother Nature and the Tax Office… what you need to know
Some people say it’s Global Warming others may say it cyclical weather patterns. No matter your view, the country has had its fair share of bushfires, floods and storms. These events can be devastating to personal property, damage to businesses, equipment and even loss of income. During an emergency, your tax obligations should be the least of your worries.
The Tax Office says that if you are affected by a natural disaster your tax affairs can be sorted out in time. They understand that you have other more immediate things to deal with. Securing your family, property and trying to get things back to normal should be your priorities, not your taxes.
Extensions when necessary
When you are faced with emergencies like a natural disaster, the Tax Office may extend your deadlines and allow you more time to lodge returns, SGC or Activity Statements. Although you may still be liable for accrued interest, you may also be eligible to vary the amount of your next instalment. Whether you are affected or you are helping someone affected, you can have the peace of mind to focus on those important issues at hand. The Tax Office offers these special considerations when you need them the most.
Your money when you need it
You may find yourself in a difficult financial situation when dealing with a natural disaster. You may be allowed to access your tax refund early if you are in need. In some circumstances, the Tax Office may process your refund as a priority, giving you access to your funds when you need it. In special cases you may be authorised to receive part of your superannuation to assist you or your family when in crisis.
Help with assistance
The Tax Office is not the only place that offers assistance during times of natural disasters. Charitable organisations such as the Red Cross or Salvation Army set up special funds for disaster relief. Government agencies such as the NDRRA have special personal hardship grants or loans you can apply for. Your current employer and family members are another resource that may be willing to help. Whereas these one-off assistance payments are generally tax-free, regular Centrelink payments remain taxable.
Personal property damage or loss is the most common occurrence during a disaster. Insurance payments can help you start to rebuild and settle back into a normal routine. However, the type of property will dictate whether or not your payment is taxable. If your property is income producing then your repair may be tax deductible in that year. But it will also depend if it was a simple repair, an improvement or a complete replacement, in which case it may not be. If you have specific questions about your property insurance or tax liability, please contact this office.
Lost tax records
Whether it was fire, water or wind, destroyed tax records are another common problem after a disaster. The Tax Office can help to reconstruct your personal, business or self-managed superannuation tax records. In some cases they can also provide assistance in making reasonable estimates where needed. This office can also help you reassemble records and access copies of lodged statements and forms.
During an emergency, you may need to purchase additional fuel to power your residential electricity. You may be able to claim the diesel or petrol cost as a fuel tax credit. Businesses that are GST registered may also claim credits for the fuel tax if used for business activities to run equipment, machinery or heavy vehicles. Even non-profit organisations can claim the tax credit for the fuel to operate emergency vehicles during a disaster or relief efforts.
Fast help when you need it
Mother Nature can be brutal, but knowing where to go, what to do and how to plan for disasters can make all the difference when faced with a crisis. Go to http://www.disasterassist.gov.au/Pages/default.aspx for current natural disaster information and assistance programmes. Ask this office (tax agents in Caulfield) if you require our services with lodging forms, payment extensions, help with lost records or expediting refunds for your established business.
Hillyer Riches Management Pty Ltd is a tax agent in Caulfield, and Corporate Authorised Representative (No 466483) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. AFSL / ACL No. 223135.This document contains general advice only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information.